If a person commits idolatry or fornication he is sinful. Not only that, but the curse of Hashem is with that person. On the other hand, if a person does a lot of mitswots (commandments) and believes in Hashem and lives by his torah then Hashem is happy with that person!

So does this mean that humans have an effect on the mood of God because we can make him angry if we don't do what he commanded us and we can make him happy with doing what he commanded us to do? Can you please clarify?

Zachariah, welcome! I hope you don't mind, but I'm going to do some editing to make your question a little bit easier to read/understand, but I will not change the meaning of the question.
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Seth JSep 22 '11 at 14:15

3 Answers
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In the Moreh Nevuchim, Rambam explains how God's attributes should be understood without compromising God's unchangingness.

He compares God's mood to a fire. If you put ice in a fire, it melts, then evaporates. If you put clay in a fire, it hardens. If you put wood in a fire it burns... The fire causes many different and contrasting effects without changing the fire's properties. The same "fire melts certain things and makes others hard, it boils and burns, it bleaches and blackens." It is the properties of each individual material that elicit a different interactions with fire.

Similarly, our actions change properties within ourselves, and it's those changes that elicit different interactions from God, without God changing.

Additionally, Rambam explains that God's "jealousy and wrath, kindle His fire and anger" are reactions solely elicited by idolatry. By worshiping idols, one makes them-self an enemy and adversary of God.

I don't think "happy" is a word we can use to describe God, it's a human/time-related state of mind. If you follow God's commandments though, He will turn His face to you - meaning Hashem will pay specific attention to you, and watch out for you.

God is beyond time and he cannot change or be affected by our actions. Whenever the Torah describes an emotion of God, there is always an action that takes place in this world with it. So a person may sin, "God gets angry at the person", and the person is punished. The meaning of God's anger can be understood as the punishment the person received. God still has will for this world, but He does not have time-bound "emotions" in response to people's actions. See the Moreh Nevuchim for further discussion of this topic.

(...) But as the human race enters into a different stage of consciousness, it may be ready for different language about God. Once you get that Judaism has had a long history of evolving conceptions and languages about God, you can get beyond the feeling that it is somehow inauthentic to talk in different language. You are not rejecting “the Jewish concept of God” when you no longer believe in some All-powerful, All-knowing Unmoved Mover who sits in heaven and sends down blessings or curses according to His mood, or a God who can be influenced by a nice-smelling lamb chop, or later by a well-intoned and correctly said prayer.

In fact, even in the past there were Jewish thinkers who pointed to the fact that the ten commandments suggest that we ought not to try to imagine God in terms of anything that is in the heaven above or the earth beneath, because God is not an idol that can be put into these forms. Torah and the tradition seem to suggest that God is Ineffable–beyond our language. Or, as Maimonides argued, God can be discussed only via negativus, through statements about what God is not. (...)

The person who downvoted - can you tell why? Take no offence, I want to know in order to understand the concept better. I have removed the part about my praise of concept of G-d in Judaism because it is off-topic. And the part of Kabbalah because it is not relevant, I believe.
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MichaelSSep 5 '12 at 17:00